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FCA fines for poor AML controls

FCA has fined EFG Private Bank Ltd (EFG) £4.2 million for failing to take reasonable care to establish and maintain effective anti-money laundering (AML) controls for high risk customers. EFG is a subsidiary of a Swiss global banking organisation which provides private banking and wealth management services to high net worth individuals. Some of its customers are based in high risk jurisdictions, and some are Politically Exposed Persons (PEPs). FSA visited EFG as part of a thematic review and found that EFG had not put its AML policies fully into practice. Nearly half of the sample of customer files it reviewed contained customer due diligence that highlighted significant money laundering risks including allegations of criminal activity on the part of the customer or that the customer had been charged with financial crime offences. The files did not adequately show how the bank’s senior management had mitigated those risks. The review also found EFG had failed to appropriately monitor its higher risk accounts. FCA found EFG had breached Principle 3. Tracey McDermott said: “In this case while EFG’s policies looked good on paper, in practice it manifestly failed to ensure that it was addressing its AML risks ... Firms that accept business from high risk customers must have systems, controls and practices to manage that risk." (Source: FCA Fines for Poor AML Controls)

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